FitLife Brands, Inc. ("FitLife") FTLF, an international provider of innovative and proprietary nutritional supplements for health conscious consumers marketed under the brand names NDS Nutrition Products™ ("NDS") (www.ndsnutrition.com), PMD® (www.pmdsports.com), SirenLabs® (www.sirenlabs.com), CoreActive® (www.coreactivenutrition.com), Metis Nutrition™ (www.metisnutrition.com), iSatori™ (www.isatori.com), Energize (www.tryenergize.com), and BioGenetic Laboratories, (www.biogeneticlabs.com), today announced results for the three and nine months ended September 30, 2017.
For the third quarter ended September 30, 2017, total revenue was $4.0 million compared to $5.3 million reported in the third quarter of 2016. The decline in revenue was primarily attributable to a challenging retail environment in concert with the continued inventory reduction initiatives of our single largest customer. Gross margin was 36.6% for the quarter compared to 37.2% during the same period a year ago. Total operating expenses were down approximately $390,000, or 16.5%, as a result of the Company's ongoing initiatives to reduce costs and maximize efficiency. Net loss for the third quarter was $0.5 million or $0.05 per share versus a loss of $0.4 million or $0.03 per share last year.
For the nine months ended September 30, 2017, total revenue was $14.6 million versus $21.6 million for the comparable period last year. Gross margin was 33.6% for the nine month period ended September 30, 2017 versus 42.3% for the comparable period last year. Excluding a non-recurring $700,000 revenue adjustment in the first quarter related to a margin support agreement with our largest customer and a $376,000 non-recurring inventory write-off during the second quarter primarily related to picamilion, gross margin of the nine month period ended September 30, 2017 would have been 39.1%. Total operating expenses declined $1.1 million, or 15.5%, to $6.2 million for the nine months ended September 30, 2017 from $7.4 million during the comparable period last year. Net loss for the nine months ended September 30, 2017 was $1.4 million or $0.13 per share compared to net income of $1.5 million or $0.13 per share last year.
The Company ended the third quarter with $1.1 million in cash, versus $2.0 million at the same time a year ago, and $1.3 million at December 31, 2016. At quarter end, total debt decreased to $2.5 million.
"We continue to experience significant challenges in our business related to both the health of the overall industry and our largest customer. In spite of such difficulties, some of which were the result of two devastating hurricanes, our performance remains strong as measured in both units sold and dollars spent at retail, representing continued strong end-consumer demand for our products," said John S. Wilson, Chief Executive Officer of FitLife Brands. "While significant challenges remain, we are starting to see improved foot traffic and other positive macro trends for the industry as a whole. We believe our differentiation at retail and lower overall cost structure ideally positions us to benefit from such factors as they unfold during the fourth quarter and into 2018. Moreover, our channel differentiation strategy for iSatori is beginning to yield results both online and continued expansion into the food, drug and mass space. We look forward to the remainder of 2017 and an expected return to profitability and growth in 2018," concluded Mr. Wilson.
About FitLife Brands
FitLife Brands is a marketer and
manufacturer of innovative and proprietary nutritional supplements for
health conscious consumers. FitLife markets over 80 different dietary
supplements to promote sports nutrition, improved performance, weight
loss and general health primarily through domestic and international
GNC® franchise locations. FitLife is headquartered in Omaha, Nebraska.
For more information please visit our new website at www.fitlifebrands.com.
Forward-Looking Statement
Statements in this release that
are forward looking involve known and unknown risks and uncertainties,
which may cause the Company's actual results in future periods to be
materially different from any future performance that may be suggested
in this news release. Such factors may include, but are not limited to:
the ability to of the Company to continue to grow revenue; and the
Company's ability to continue to achieve positive cash flow given the
Company's existing and anticipated operating and other costs. Many of
these risks and uncertainties are beyond the Company's control.
Reference is made to the discussion of risk factors detailed in The
Company's filings with the Securities and Exchange Commission including
its reports on Form 10-K and 10-Q. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the dates on which they are made.
Non-GAAP Financial Measures
This press release includes the
following financial measures defined as "non-GAAP financial measures" by
the Securities and Exchange Commission: non-GAAP net income, non-GAAP
earnings per share. These measures may be different from non-GAAP
financial measures used by other companies. The presentation of this
financial information, which is not prepared under any comprehensive set
of accounting rules or principles, is not intended to be considered in
isolation or as a substitute for the financial information prepared and
presented in accordance with generally accepted accounting principles.
Reconciliations of these non-GAAP financial measures to the nearest
comparable GAAP measures will be provided upon the completion of the
Company's annual audit.
Non-GAAP net income excludes items such as impairment charges, allowance for doubtful accounts, charges to consolidate and integrate recently acquired businesses, costs of closing corporate facilities, non-cash stock based compensation and other one-time cash and non-cash charges. Non-GAAP EPS excludes items such as non-cash stock based compensation, charges to consolidate and integrate recently acquired businesses, costs for closing corporate facilities, amortization of acquired intangible assets and other one-time cash and non-cash charges. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses or net purchases of property and equipment, as the case may be, which may not be indicative of its core operation results and business outlook.
| FITLIFE BRANDS, INC. | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| ASSETS: | September 30, | December 31, | ||||||||
| 2017 | 2016 | |||||||||
| CURRENT ASSETS | ||||||||||
| Cash | $ | 1,104,872 | $ | 1,293,041 | ||||||
| Accounts receivable, net | 3,380,984 | 2,792,649 | ||||||||
| Security deposits | 24,956 | 24,956 | ||||||||
| Inventory | 2,869,383 | 3,756,716 | ||||||||
| Note receivable, current portion | 48,727 | 2,782 | ||||||||
| Prepaid income tax | 120,000 | 120,000 | ||||||||
| Prepaid expenses and other current assets | 184,958 | 136,014 | ||||||||
| Total current assets | 7,733,880 | 8,126,158 | ||||||||
| PROPERTY AND EQUIPMENT, net | 145,910 | 171,004 | ||||||||
| Note receivable, net of current portion | - | 52,696 | ||||||||
| Deferred Taxes | 689,000 | 689,000 | ||||||||
| Intangibles assets, net | 6,212,193 | 6,507,505 | ||||||||
| TOTAL ASSETS | $ | 14,780,983 | $ | 15,546,363 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Accounts payable | $ | 2,476,417 | $ | 1,596,748 | ||||||
| Accrued expenses and other liabilities | 590,756 | 539,765 | ||||||||
| Litigation Reserve | - | - | ||||||||
| Income tax payable | - | - | ||||||||
| Line of credit | 1,950,000 | 1,950,000 | ||||||||
| Term loan agreement, current portion | 506,889 | 544,825 | ||||||||
| Notes payable | 4,131 | 12,700 | ||||||||
| Total current liabilities | 5,528,193 | 4,644,038 | ||||||||
| LONG-TERM DEBT, net of current portion | - | 369,177 | ||||||||
| TOTAL LIABILITIES | 5,528,193 | 5,013,215 | ||||||||
| CONTINGENCIES AND COMMITMENTS | - | - | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||||
|
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2017 and December 31, 2016: |
||||||||||
|
Preferred stock Series A; 10,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2017 and December 31, 2016 |
- | - | ||||||||
|
Preferred stock Series B; 1,000 shares authorized; 0 shares issued and outstanding as of June 30, 2017 and December 31, 2016 |
- | - | ||||||||
|
Preferred stock Series C; 500 shares authorized; 0 shares issued and outstanding as of June 30, 2017 and December 31, 2016 |
- | - | ||||||||
|
Common stock, $.01 par value, 150,000,000 shares authorized; 10,590,189 and 10,449,520 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively |
106,235 | 104,495 | ||||||||
| Subscribed common stock | - | 339 | ||||||||
| Treasury stock | - | (44,416 | ) | |||||||
| Additional paid-in capital | 30,988,947 | 30,919,289 | ||||||||
| Accumulated deficit | (21,842,392 | ) | (20,446,559 | ) | ||||||
| Total stockholders' equity | $ | 9,252,790 | $ | 10,533,148 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 14,780,983 | $ | 15,546,363 | ||||||
| The accompanying notes are an integral part of these consolidated financial statements | ||||||||||
| FITLIFE BRANDS, INC. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 | ||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Revenue | $ | 4,025,580 | $ | 5,340,616 | $ | 14,637,273 | $ | 21,615,605 | ||||||||||||
| Cost of Goods Sold | 2,550,760 | 3,353,224 | 9,718,670 | 12,469,081 | ||||||||||||||||
| Gross Profit | 1,474,820 | 1,987,392 | 4,918,603 | 9,146,524 | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||
| General and administrative | 1,030,215 | 1,131,692 | 3,200,218 | 3,854,128 | ||||||||||||||||
| Selling and marketing | 828,829 | 1,088,400 | 2,689,587 | 3,138,323 | ||||||||||||||||
| Depreciation and amortization | 98,917 | 125,751 | 335,566 | 376,502 | ||||||||||||||||
| Total operating expenses | 1,957,961 | 2,345,843 | 6,225,371 | 7,368,953 | ||||||||||||||||
| OPERATING INCOME (LOSS) | (483,141 | ) | (358,451 | ) | (1,306,768 | ) | 1,777,571 | |||||||||||||
| OTHER (INCOME) AND EXPENSES | ||||||||||||||||||||
| Interest expense | 28,243 | 27,417 | 83,920 | 84,016 | ||||||||||||||||
| Other expense (income) | - | (150 | ) | 5,145 | (2,917 | ) | ||||||||||||||
| Total other (income) expense | 28,243 | 27,267 | 89,065 | 81,099 | ||||||||||||||||
| INCOME TAXES (BENEFIT) | - | (25,000 | ) | - | 164,000 | |||||||||||||||
| NET INCOME (LOSS) | $ | (511,384 | ) | $ | (360,718 | ) | $ | (1,395,833 | ) | $ | 1,532,472 | |||||||||
| NET INCOME (LOSS) PER SHARE: | ||||||||||||||||||||
| Basic | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.13 | ) | $ | 0.15 | |||||||||
| Diluted | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.13 | ) | $ | 0.13 | |||||||||
| Basic | 10,537,805 | 10,446,954 | 10,488,135 | 10,413,703 | ||||||||||||||||
| Diluted | 10,537,805 | 10,446,954 | 10,488,135 | 11,515,169 | ||||||||||||||||
| The accompanying notes are an integral part of these consolidated financial statements | ||||||||||||||||||||
| FITLIFE BRANDS, INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 | ||||||||||
| (Unaudited) | ||||||||||
| 2017 | 2016 | |||||||||
| Net income | $ | (1,395,833 | ) | $ | 1,532,472 | |||||
|
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||||
| Depreciation and amortization | 335,566 | 376,502 | ||||||||
| Common stock issued (cancelled) for services | 82,001 | 105,501 | ||||||||
| Warrants and options issued (cancelled) for services | 33,474 | 45,028 | ||||||||
| Gain on write-up of investment | 5,145 | - | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | (588,335 | ) | (1,369,673 | ) | ||||||
| Inventory | 887,333 | 357,326 | ||||||||
| Deferred tax asset | - | 123,879 | ||||||||
| Prepaid income tax | - | 151,000 | ||||||||
| Prepaid expenses | (48,944 | ) | 145,167 | |||||||
| Note receivable | 6,751 | 9,985 | ||||||||
| Accounts payable | 879,669 | (666,806 | ) | |||||||
| Accrued liabilities | 50,991 | (369,941 | ) | |||||||
| Litigation reserve | - | (95,775 | ) | |||||||
| Income tax payable | - | 13,000 | ||||||||
| Net cash provided by (used in) operating activities | 247,818 | 357,665 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Purchase of property and equipment | (20,305 | ) | (21,619 | ) | ||||||
| Long-term investment | - | 2,027 | ||||||||
| Repurchases of common stock | - | - | ||||||||
| Net cash provided by (used in) investing activities | (20,305 | ) | (19,592 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Proceeds from draw down on credit line | - | 520,000 | ||||||||
| Payments for redemption of preferred stock | - | - | ||||||||
| Repayments of note payable | (415,682 | ) | (404,261 | ) | ||||||
| Net cash provided by (used in) financing activities | (415,682 | ) | 115,739 | |||||||
| INCREASE (DECREASE) IN CASH | (188,169 | ) | 453,812 | |||||||
| CASH, BEGINNING OF PERIOD | 1,293,041 | 1,532,550 | ||||||||
| CASH, END OF PERIOD | $ | 1,104,872 | $ | 1,986,362 | ||||||
| Supplemental disclosure operating activities | ||||||||||
| Cash paid for interest | $ | 83,920 | $ | 84,016 | ||||||
| The accompanying notes are an integral part of these consolidated financial statements | ||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171115005310/en/
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
